U.S. consumer sentiment unexpectedly rose in October to its highest level in five years as optimism about the overall economy improved, a survey released on Friday showed.
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The Thomson Reuters/University of Michigan's preliminary October reading on the overall index on consumer sentiment came in at 83.1, up from 78.3 the month before, marking the highest level since September 2007.
The reading was well above the median forecast for a slight decline to 78 among economists polled by Reuters.
"What changed was how (consumers) evaluated economic conditions," survey director Richard Curtin said in a statement. "Economic conditions during the year ahead were expected to be 'good' by more consumers, and more consumers expected 'good' economic times over the next five years."
The survey's barometer of current economic conditions rose to 88.6 from 85.7 and was above a forecast of 86.
The survey's gauge of consumer expectations jumped to 79.5 from 73.5, above an expected reading of 74. Expectations were at their highest since July 2007.
The survey's one-year inflation expectation fell to 3.1 percent from 3.3 percent, while the survey's five-to-10-year inflation outlook fell to 2.6 percent from 2.8 percent, its lowest since March 2009.